AER LINGUS ANNOUNCES CUT TO LONG-HAUL FLEET - Aer Lingus has negotiated a new deal with Airbus on the delivery of new planes. The airline is to spend much less cash on new planes and will also keep its long-haul fleet at eight aircraft until 2013. It is also ending leases early on two long haul planes. One plane will leave the fleet in October - 18 months ahead of schedule while a second one will leave next March - 14 months ahead of schedule.
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BANKS BEGIN FIRST-HALF REPORTING SEASON - Global stock markets hit their highest levels of the year yesterday after better than expected profits at HSBC, Europe's biggest bank, and as Barclays reported an 8% jump in profits for the first six months of its financial year. Several more banks had results this morning with Northern Rock, the British bank that was nationalised in February last year, reporting a loss of £724.2m sterling for the first six months of the year. This was more than the £585m at the same time last year. The bank said that almost 4% of its mortgage loans are more than three months in arrears, well above the national average of 2.3%.
Swiss investment bank UBS has reported a loss as expected, and said its outlook is cautious, and a recovery will be constrained by low credit creation. Elsewhere BNP Paribas reports that it net profit is up by 6.6% and it says it is well placed to cope with market conditions. Asia-focused Standard Chartered says its first-half pretax profit beat forecasts and increased by 10%.
James Hughes, of CMC Markets in London, says that things in the financial markets are slowly starting to turn around, despite the warning from Northern Rock this morning. He says the 'transitional' period is being reached where markets are starting to turn around while economic data is also starting to improve from the euro zone, the UK and the US. But he cautions that it is too early to say that we are completely out of the woods just yet.
Mr Hughes says he was surprised by Northern Rock's announcement this morning that it is going to lend less than expected, as up to a few months ago the bank was being hailed as the saviour of lending. He says the Rock is waiting for the European regulatory clearance for more funding to help it continue lending and he says until some more solid data is received on the statement it is hard to see where the bank is going with it.
The analyst also says that Northern Rock's results statement contains such worrying aspects - including the fact that about 4% of mortgage loans are over three months in arrears. He says that 40% of Northern Rock borrowers now owe more on their mortgage than their home is worth. He said this shows the spiralling debt of not just the Rock's customers but of the general public.
